Development of National Loss Reduction Plan and capacity building among water suppliers

The water management sector in Croatia is facing multiple challenges, including fragmentation, lack of human capacity, efficiency issues and, without restructuring and reform, it is not expected to be able to respond to the requirements set by the relevant EU Directives. The aim of the reform is to achieve the economy and efficiency of operations of the water utility sector through strengthening of the Public Water Service Providers (PWSP) capacity and organization. The need to support PWSP’s is particularly important in terms of improving their capacity to reduce excessive water losses from water supply systems, which are on average 50%, and are caused by several factors including the old age of the network, the lack of financial resources and technical capacity to upgrade and replace inadequate infrastructure, and lack of well-structured financial incentives.

Context

Croatia is facing a two-folded issue in the water sector: on one side it has too many water suppliers which result in an inefficient market situation (water governance); on the other side it has excessive water losses in the network estimated on average at 50% of all the extracted water or more than 233 billion of litres in 2020 (water infrastructure). Additionally, the water charges are calculated on the water delivered to the users and not on the extracted water, therefore water losses lead to foregone revenues for the water suppliers, hindering their ability to perform maintenance and investments on the water network. This multi-faceted issue negatively impacts all citizens, economic activities and the environment. First, excessive losses require to abstract additional water and hence pose a strain on water resources. Second, leaks in water pipes might allow for contamination of water and thereby threaten the health of water users. Third, leaks from water pipes can also bring harmful chemicals in the environment and cause significant damage impacting biodiversity; for instance, estimates consider that leaked water in 2020 brought 47 additional tons of chlorine into the environment.

To tackle the issue, the Croatian RRP foresees 7 different milestones/targets (#60, 61, 62, 68, 71, 72, 73). However, the capacity of Croatia to implement reforms and absorb funds in the water sector raises some concerns, for instance to date Croatia managed to absorb only 16% of the 2014-2020 Cohesion funds for the water sector.

In this framework, Croatia adopted a law which from 2023 onwards changes the calculation of water charges (they will be on extracted water and not on delivered water). To avoid a spike in water prices, Croatia needs support to:

• Build capacity and set the ground for the consolidation of water suppliers and for making them more efficient.
• Develop a National Loss Reduction Action Plan (NLRAP) to reduce water losses.
• Build capacity among water suppliers to develop and implement the NLRAP.
• set up a national monitoring body to follow-up with the implementation of the NLRAP.

Support delivered

The support measures involved:

1. Analyse the state of play for both the governance (excessive number of inefficient water suppliers) and the infrastructural issue (excessive water losses)
2. Draft National Loss Reduction Action Plan (NLRAP) engaging all the stakeholders, in particular the largest 20 water suppliers that count 74% of the total water losses.
3. Capacity building for water suppliers to develop and implement the NLRAP, in particular via trainings and by setting up a platform of exchange between suppliers
4. Capacity building for water suppliers to identify possibilities to consolidate and to have efficiency gains by looking at international best practices (current projects 20LT08 and 20EE09 and the request 22SK15 tackle similar issues in the respective countries). Croatia requested 8 workshops to ensure a high level of capacity is reached among the water suppliers.
5. Setup of a national monitoring body within the Ministry of Environment to ensure an appropriate follow-up to the implementation of the NLRAP.
6. finalize the NLRAP based on the feedback from the stakeholders as well as from the implementation of the project.

Results achieved

The technical support would enable Croatia to build its capacity in the water sector and thereby effectively address both the governance issue in the water sector (by enabling the possibility of consolidating water suppliers) as well as the infrastructure issue (by delivering a National Loss Reduction Plan (NLRAP) develop in consultation with the relevant stakeholders). Moreover, the technical support will also help setting up a national monitoring body to ensure proper follow-up on the NLRAP.

More about the project

You can read the documents related to the project here: